Proposed Rule2026-07617
Single Family Housing Guaranteed Loan Program-Limited Party Concessions
Primary source
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Published
April 20, 2026
Issuing agencies
Agriculture DepartmentRural Housing Service
Abstract
The Rural Housing Service (RHS or Agency), an agency of the Rural Development (RD) mission area within the U.S. Department of Agriculture (USDA), proposes to amend the current Single Family Housing Guaranteed Loan Program (SFHGLP) regulation to specify that real estate commission fees are excluded from interested party limitations.
Full Text
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<title>Federal Register, Volume 91 Issue 75 (Monday, April 20, 2026)</title>
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[Federal Register Volume 91, Number 75 (Monday, April 20, 2026)]
[Proposed Rules]
[Pages 20941-20943]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-07617]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 91, No. 75 / Monday, April 20, 2026 /
Proposed Rules
[[Page 20941]]
DEPARTMENT OF AGRICULTURE
Rural Housing Service
7 CFR Part 3555
[Docket No. RHS-25-SFH-0003]
RIN 0575-AD47
Single Family Housing Guaranteed Loan Program--Limited Party
Concessions
AGENCY: Rural Housing Service, Agriculture Department (USDA).
ACTION: Proposed rule.
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SUMMARY: The Rural Housing Service (RHS or Agency), an agency of the
Rural Development (RD) mission area within the U.S. Department of
Agriculture (USDA), proposes to amend the current Single Family Housing
Guaranteed Loan Program (SFHGLP) regulation to specify that real estate
commission fees are excluded from interested party limitations.
DATES: Comments must be submitted on or before June 22, 2026.
ADDRESSES: Comments may be submitted by going to the Federal
eRulemaking Portal, <a href="http://regulations.gov">regulations.gov</a> and in the ``Search for dockets and
documents on agency actions'' box, enter the docket number, ``Docket
No. RHS-25-SFH-0003'', and click the ``Search'' button. From the search
results: click on or locate the document title: Single Family Housing
Guaranteed Loan Program-Limited Party Concessions'' and select the
``Comment'' button. Before inputting comments, commenters may review
the ``Commenter's Checklist'' (optional), or the Regulatory Information
Number (RIN) provided above in this notice and click the ``Search''
button. To submit a comment: Insert comments under, choose the
``Comment'' title, click ``Browse'' to attach files (if available),
input email address, select box to opt to receive email confirmation of
submission and tracking (optional), select the box ``I'm not a robot,''
and then select ``Submit Comment'' button associated with this
rulemaking. Information on using Regulations.gov, including
instructions for accessing documents, submitting comments, and viewing
the docket after the close of the comment period, is available under
the site's ``FAQ'' link. All comments will be available for public
inspection online at the Federal eRulemaking Portal (<a href="http://regulations.gov">regulations.gov</a>)
tab at the bottom of the Home page.
Additional information about Rural Development and its programs is
available on the internet at <a href="http://www.rurdev.usda.gov/index.html">http://www.rurdev.usda.gov/index.html</a>.
FOR FURTHER INFORMATION CONTACT: Laurie Mohr, Finance and Loan Analyst,
Single Family Housing Guaranteed Loan Division, Rural Development 1400
Independence Avenue SW, Washington, DC 20250-0784. Telephone: (314)
679-6917; or email: <a href="/cdn-cgi/l/email-protection#98f4f9edeaf1fdb6f5f7f0ead8edebfcf9b6fff7ee"><span class="__cf_email__" data-cfemail="aec2cfdbdcc7cb80c3c1c6dceedbddcacf80c9c1d8">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Abbreviations
CFR Code of Federal Regulations
ET SEQ. Et Sequens/Sequentes (``and what follows'')
FNMA Federal National Mortgage Association, ``Fannie Mae''
FHA Federal Housing Administration
FR Federal Register
FHLMC Federal Home Loan Mortgage Corporation, ``Freddie Mac''
HB-3555 Handbook-1-3555, Single Family Housing Guaranteed Loan
Program Technical Handbook
HUD U.S. Department of Housing and Urban Development
RHS Rural Housing Service
Sec. Section
U.S.C. United States Code
VA U.S. Department of Veterans Affairs
I. Authority
SFHGLP is authorized by Section 502(h) of Title V of the Housing
Act of 1949 (42 U.S.C. 1472(h)), as amended; and is implemented by 7
CFR part 3555.
II. Background
The Agency offers a variety of programs to build or improve housing
and essential community facilities in rural areas. RHS offers loans,
grants, and loan guarantees for single and multi-family housing,
childcare centers, fire and police stations, hospitals, libraries,
nursing homes, schools, first responder vehicles and equipment, housing
for farm laborers, and much more. The RHS also provides technical
assistance loans and grants in partnership with non-profit
organizations, Indian tribes, State and Federal Government agencies,
and local communities.
Under the authority of the Housing Act of 1949, (42 U.S.C. 1472, et
seq.), as amended, the SFHGLP makes loan guarantees to provide low- and
moderate-income persons in rural areas an opportunity to own decent,
safe, and sanitary dwellings and related facilities. Approved lenders
make the initial eligibility determinations, and the Agency reviews
those determinations to make a final eligibility decision.
This program helps lenders work with low- and moderate-income
households living in rural areas to make homeownership a reality.
Providing affordable homeownership opportunities promotes prosperity,
which in turn creates thriving communities and improves the quality of
life in rural areas.
III. Discussion of the Proposed Rule
Currently, under 7 CFR part 3555, if the seller agrees to pay fees
on behalf of the buyer, including real estate commission fees, the
amount of those fees is included in the maximum interested party
contribution limitation of 6 percent. Specifically, 7 CFR 3555.102(h)
states seller concessions include all the following items: purchaser's
mortgage financing costs, closing costs, escrow accounts, furniture, or
other giveaways that are paid by the seller or other interested third
party.
The Agency is specifically addressing the real estate commission
fee in this proposal as it is expected that homebuyers will become
responsible to pay these fees due to changing market conditions in the
real estate environment because of a national lawsuit and
settlement.\1\ The result is that real estate commission fees could be
paid by the buyer or negotiated into the purchase contract as a seller
concession. This could increase closing costs to the SFHGLP buyer and
make it more difficult for them to purchase a home using this program,
as sellers or other interested parties are limited to contributing a
combined maximum of 6 percent of the sales price in the transaction.
The mortgage industry is taking the stance that with these anticipated
changes within the industry,
[[Page 20942]]
real estate commission fees should not be included when calculating the
interested party concession maximum calculation.\2\ The U.S. Department
of Housing and Urban Development (HUD), administered through the
Federal Housing Administration (FHA) has stated that if the seller
continues to pay for the buyer's side real estate agent commissions and
fees as a matter of state and local custom, and if the commissions and
fees are reasonable in amount, these fees would not be included in the
interested party contributions, provided all other requirements of FHA
are met.\3\ The U.S. Department of Veterans Affairs (VA) interpretation
of seller concessions already excluded the real estate commission fees
from the 6 percent limitation. However, VA did need to provide a new
variance to allow the VA applicant to pay the real estate commission
fee, as previously it was prohibited. The government sponsored
enterprises (GSEs), Fannie Mae (FNMA) and Freddie Mac (FHLMC), also
permit interested parties to make contributions to borrowers' closing
costs subject to maximum limits for common and customary fees or costs.
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\1\ National Association of Realtors (NAR), et al., Burnett et
al. and Moehrl, et al. cases.
\2\ FHA Info 2024-12 Bulletin (March 28, 2024), Fannie Mae
Selling Notice (April 15, 2024), Freddie Mac Industry Letter (April
15, 2024).
\3\ FHA Info 2024-12 Bulletin (March 28, 2024).
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If the real estate commission fee is reasonable and customary and
meets all other requirements, FHA, VA, Fannie Mae, and Freddie Mac
allow the commission fee to be excluded from the limited party
contribution calculations. This proposed rule aligns the program with
these entities by excluding the fee from the seller concession
calculation. This allows more applicants access to the SFHGLP to
purchase homes in rural areas. The Agency proposes to alter the current
regulation by clarifying the real estate commission fees are excluded
from the calculation of the 6 percent interested party concession
limitation.
The proposed rule adjusts to changes in the mortgage industry to
allow the real estate commission fee to be a negotiated fee in the real
estate environment. SFHGLP borrowers can finance this fee if it is
deemed a normal and customary fee pursuant to 7 CFR
3555.101(b)(6)(vii), however if the seller pays the fee on the buyer's
behalf, it currently would be included in the 6 percent limit, severely
limiting potential SFHGLP applicants. Allowing the real estate
commission fee to be excluded from the 6 percent seller concession
calculation would allow additional funds contributed by the seller to
be used to help applicants pay closings costs, fund repairs, or cover
other necessary items in the real estate transaction. This allows
applicants to save more of their own funds for future expenditures;
make home improvements; or allow them to buy goods and services,
putting money back into the economy. Borrowers become financially
stronger and rural America benefits with more homeownership.
IV. Request for Comment
Stakeholder input is vital to the Agency to ensure that the
proposed changes support the Agency's mission, while ensuring that new
regulations and policies don't unreasonably burden potential lenders
and their customers. Comments must be submitted on or before June 22,
2026 and may be submitted electronically by going to the Federal
eRulemaking Portal. Details on how to submit comments to the Federal
eRulemaking Portal are in the ADDRESSES section of this proposed rule.
V. Executive Orders/Acts
Executive Order 12372--Intergovernmental Review of Federal Programs
This proposed rule is not subject to the requirements of Executive
Order 12372, ``Intergovernmental Review of Federal Programs,'' as
implemented under USDA's regulations at 2 CFR part 415, subpart C.
Executive Order 12866--Regulatory Planning and Review
This proposed rule has been designated not significant for purposes
of Executive Order 12866. Accordingly, the rule has not been reviewed
by the Office of Management and Budget (OMB).
Executive Order 12988--Civil Justice Reform
This proposed rule has been reviewed under Executive Order 12988.
In accordance with this rule: (1) unless otherwise specifically
provided, all State and local laws that conflict with this rule will be
preempted; (2) no retroactive effect will be given to this rule except
as specifically prescribed in the rule; and (3) administrative
proceedings of the National Appeals Division of the Department of
Agriculture (7 CFR part 11) must be exhausted before bringing suit in
court that challenges action taken under this rule.
Executive Order 13132--Federalism
The policies contained in this proposed rule do not have any
substantial direct effect on States, on the relationship between the
National Government and States, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
proposed rule impose substantial direct compliance costs on state and
local governments. Therefore, consultation with the States is not
required.
Executive Order 13175--Consultation and Coordination With Indian Tribal
Governments
This proposed rule has been reviewed in accordance with the
requirements of Executive Order 13175, Consultation and Coordination
with Indian Tribal Governments. Executive Order 13175 requires Federal
agencies to consult and coordinate with tribes on a government-to-
government basis on policies that have tribal implications, including
regulations, legislative comments or proposed legislation, and other
policy statements or actions that have substantial direct effects on
one or more Indian tribes, on the relationship between the government
and Indian tribes or on the distribution of power and responsibilities
between the Federal government and Indian tribes. Consultation is also
required for any regulation that preempts tribal law or that imposes
substantial direct compliance costs on Indian tribal governments and
that is not required by statute.
The Agency has determined that this proposed rule does not, to our
knowledge, have tribal implications that require formal tribal
consultation under Executive Order 13175. If a Tribe requests
consultation, the Agency will work with the Office of Tribal Relations
to ensure meaningful consultation is provided where changes, additions
and modifications identified herein are not expressly mandated by
Congress.
Executive Order 13563--Improving Regulation and Regulatory Review
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and
promoting flexibility. This proposed rule has been designated a ``non-
significant regulatory action,'' under section 3(f) of Executive Order
12866. Accordingly, the rule has not been reviewed by the Office of
Management and Budget (OMB).
Civil Rights Impact Analysis
This proposed rule was reviewed in accordance with USDA Regulation
4300-004, ``Civil Rights Impact Analysis,'' to identify any major civil
rights impacts the proposed rule might have on program participants on
the basis of age, race, religion, color,
[[Page 20943]]
national origin, sex, disability, marital status, or familial status.
Based on the results of the review and analysis of the proposed rule
and all available data, issuance of this proposed rule is not likely to
negatively impact any group identified by protected group status.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for federal agencies to assess the
effect of their regulatory actions on state, local, and tribal
governments, and the private sector. Under section 202 of the UMRA, the
Agency generally must prepare a written statement, including a cost-
benefit analysis, for proposed and final rules with ``federal
mandates'' that may result in expenditures to state, local, or tribal
governments, in the aggregate, or to the private sector, of $100
million, or more in any one year. When such a statement is needed for a
rule, section 205 of the UMRA generally requires the Agency to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective, or least burdensome alternative
that achieves the objectives of the rule.
This proposed rule contains no federal mandates (under the
regulatory provisions of Title II of the UMRA) for state, local, and
tribal governments, or the private sector. Therefore, this rule is not
subject to the requirements of sections 202 and 205 of the UMRA.
National Environmental Policy Act
In accordance with the National Environmental Policy Act of 1969,
Public Law 91-190, this proposed rule has been reviewed in accordance
with 7 CFR part 1b (``National Environmental Policy Act''). The Agency
has determined that (i) this action meets the criteria established in 7
CFR 1b and (ii) no extraordinary circumstances exist. Therefore, the
Agency has determined that the action does not have a significant
effect on the human environment, and therefore neither an Environmental
Assessment nor an Environmental Impact Statement is required.
Regulatory Flexibility Act
This proposed rule has been reviewed with regard to the
requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). The
undersigned has determined and certified by signature on this document
that this rule will not have a significant economic impact on a
substantial number of small entities since this rulemaking action does
not involve a new or expanded program nor does it require any more
action on the part of a small business than required of a large entity.
Programs Affected
The program affected by this proposed rule is listed in the
Assistance Listing (AL) Number 10.410, Very Low- to Moderate-Income
Housing Loans (Section 502 Rural Housing Loans).
Paperwork Reduction Act
This proposed rule contains no new reporting or recordkeeping
burdens under OMB control number 0575-0179 that would require approval
under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
E-Government Act Compliance
Rural Development is committed to the E-Government Act, which
requires Government agencies in general to provide the public the
option of submitting information or transacting business electronically
to the maximum extent possible.
Non-Discrimination Policy
In accordance with Federal civil rights law and U.S. Department of
Agriculture (USDA) civil rights regulations and policies, the USDA, its
Agencies, offices, and employees, and institutions participating in or
administering USDA programs are prohibited from discriminating based on
race, color, national origin, religion, sex, disability, age, marital
status, family/parental status, income derived from a public assistance
program, political beliefs, or reprisal or retaliation for prior civil
rights activity, in any program or activity conducted or funded by USDA
(not all bases apply to all programs). Remedies and complaint filing
deadlines vary by program or incident.
Persons with disabilities who require alternative means of
communication for program information (e.g., Braille, large print,
audiotape, American Sign Language, etc.) should contact the State or
local Agency that administers the program or contact USDA through the
Telecommunications Relay Service at 711 (voice and TTY). Additionally,
program information may be made available in languages other than
English.
To file a program discrimination complaint, complete the USDA
Program Discrimination Complaint Form, AD-3027, found online at How to
File a Program Discrimination Complaint (<a href="https://www.usda.gov/about-usda/general-information/staff-offices/office-assistant-secretary-civil-rights/how-file-program-discrimination-complaint">https://www.usda.gov/about-usda/general-information/staff-offices/office-assistant-secretary-civil-rights/how-file-program-discrimination-complaint</a>) and at any USDA
office or write a letter addressed to USDA and provide in the letter
all of the information requested in the form. To request a copy of the
complaint form, call (866) 632-9992. Submit your completed form or
letter to USDA by: (1) mail: U.S. Department of Agriculture, Office of
the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW,
Mail Stop 9410, Washington, DC 20250-9410; (2) fax: (202) 690-7442; or
(3) email: <a href="/cdn-cgi/l/email-protection#2c5c5e434b5e4d41024542584d47496c595f484d024b435a"><span class="__cf_email__" data-cfemail="bdcdcfd2dacfdcd093d4d3c9dcd6d8fdc8ced9dc93dad2cb">[email protected]</span></a>. USDA is an equal opportunity
provider, employer, and lender.
List of Subjects in 7 CFR Part 3555
Administrative practice and procedure, Conflicts of interest,
Credit, Environmental impact statements, Fair housing, Flood insurance,
Housing, Loan programs--housing and community development, Low and
moderate income housing, Manufactured homes, Mortgage insurance,
Mortgages, Reporting and recordkeeping requirements, Rural areas.
For the reasons discussed in the preamble, the Agency is proposing
to amend 7 CFR part 3555 as follows:
PART 3555--GUARANTEED RURAL HOUSING PROGRAM
0
1. The authority citation for 7 CFR part 3555 continues to read as
follows:
Authority: 5 U.S.C. Sec. 301; 42 U.S.C. Sec. 1472(h)
Subpart C--Loan Requirements
0
2. Amend Sec. 3555.102 by revising the definition terms for seller
concessions in paragraph (h) to read as follows:
Sec. 3555.102 Loan restrictions.
* * * * *
(h) Seller concessions. Purchasing a home if the seller, or other
interested third party, contributes more than 6 percent, unless
otherwise provided by the Agency, of the property's sales price toward
the purchaser's mortgage financing costs, closing costs, escrow
accounts, furniture, or other giveaways. Real estate commission fees
are excluded from the 6 percent seller concession limitation.
* * * * *
George Kelly,
Administrator, Rural Housing Service.
[FR Doc. 2026-07617 Filed 4-17-26; 8:45 am]
BILLING CODE 3410-XV-P
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